Prices climbing in world's last bastion of cheap beef

Cheap beef may soon become further out of reach.

- DAYANNE SOUSA

Brazil, one of the world’s few remaining sources of abundant cattle, is heading into a period of shrinking supplies that could push global prices higher.For the past two years, a surge in Brazil’s beef production helped fuel a jump in exports. That’s as ample herds drove cattle prices lower compared to other regions, and ranchers were encouraged to send more animals to slaughter. At the same time, countries such as the US struggled with high food costs, and sought out sources of cheaper beef.

That cycle is turning, with impacts that will ripple through global markets and hamper US President Donald Trump's efforts to bring down beef prices.

Climbing prices for calves in Brazil are signalling the start of a new phase, in which ranchers start holding back female cattle to rebuild herds. The practice, known as heifer retention, reduces the number of animals sent to slaughter and marks the beginning of a tightening supply cycle.